Lot size based quantity discounts
A) decrease the lot size of orders placed within the supply chain.
B) increase the lot size of orders placed within the supply chain.
C) magnify the bullwhip effect.
D) A and C only
E) B and C only

Question

Quizplus · Accepted Answer

Lot size based quantity discounts encourage larger order sizes to take advantage of the discount, thus increasing the lot size of orders. This can also lead to increased variability in order quantities, magnifying the bullwhip effect.

Lot Size Based Quantity Discounts